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Question 4 View Policies Current Attempt in Progress In 2019, Cullumber Company had a break-even point of $309,000 based on a
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Answer #1

Answer a):-

Variable cost per unit = $3.5 per unit

Contribution margin ratio (2019)=30%

Workings:-

In 2019,

Break even in dollar sales = Fixed costs/Contribution margin ratio

Contribution margin ratio = Fixed Cost / Break even sales in dollar

Contribution margin ratio =92700/309,000

Contribution margin ratio = 30%

Variable cost ratio = 1- Contribution margin ratio

Variable cost ratio = 1 - 30%

Variable cost ratio = 70%

Variable cost per unit = 5 *70%(selling price * variable cost ratio)

Variable cost per unit = $3.5

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